- Trump blasted Powell as “too late” again, urging faster rate cuts.
- Markets see near-certainty of a September cut, with some chance of 50 bps.
- Weak jobs growth collides with sticky inflation, leaving the Fed in a bind.
President Trump is once again turning up the heat on the Federal Reserve and its chair, Jerome Powell, after a disappointing nonfarm payrolls report shook confidence in the labor market.
In a sharp post on Truth Social, Trump blasted Powell: “Jerome ‘Too Late’ Powell should have lowered rates long ago. As usual, he’s ‘Too Late!’” His criticism adds fresh political pressure on the Fed, which already faces an increasingly complicated balancing act.
Fed Eyes September Cut Amid Growing Uncertainty
Markets are betting heavily that the Fed will trim interest rates at its upcoming September 16–17 FOMC meeting. The CME FedWatch tool puts odds of a 25 basis point cut at nearly certain levels, while a more aggressive 50 bps cut carries a slimmer—yet notable—14.2% chance.
For traders, the debate is less about if cuts are coming, but how deep and how fast they’ll go.
Job Growth Stalls While Inflation Still Lurks
August’s nonfarm payrolls landed at just 22,000 new jobs, a sharp miss against the 75,000 economists expected. The weak report strengthens the case for easing, since the Fed’s mandate includes maintaining maximum employment alongside price stability.
But the inflation picture complicates things. Trump’s tariffs continue to stir cost pressures, and July’s data didn’t help. Core PCE, the Fed’s preferred gauge, rose at its fastest annual pace since February, while producer prices logged their biggest monthly jump since early 2022.
That leaves Powell and the Fed walking a tightrope: cut too slowly, and the labor market may weaken further; cut too aggressively, and inflation could roar back.
